SoMa fund to add $10M to buy small housing sites in the neighborhood

Source: San Francisco Examiner

The SOMA Community Stabilization Fund was created with the intent to help residents in the South of Market neighborhood avoid being displaced as a result of new development. (Emma Chiang/Special to S.F. Examiner)

By Joshua Sabatini

San Francisco plans to use $10 million in development fees to purchase small properties in the South of Market neighborhood to prevent tenants from being displaced.

The money is the result of a special charge to developers in the Rincon Hill area that flows into the so-called SOMA Community Stabilization Fund, created in a landmark deal that dates back to 2005 and is intended to help residents survive economic pressures as a result of new development.

The funding is allocated based on the recommendations of a community advisory committee.

On Thursday, the Board of Supervisors Budget and Finance Committee approved 22 grants to nonprofits next fiscal year — a combined $1.2 million from the SoMa fund for job training, community building events and eviction prevention.

The grants include $50,000 for West Bay Pilipino Multi-Service Center for preparing residents, $75,000 for Asian Pacific Islander Legal Outreach for eviction prevention and $75,000 for the Filipino American Development Foundation for a night market to promote SoMa Pilipinas and small businesses.

In addition to the $1.2 million in grants, the committee approved putting $10 million in the SoMa fund into the Small Sites Program that would pay for the purchasing of yet-identified sites in the neighborhood, but the Mayor’s Office of Housing, which oversees the fund, said it has one site it cannot disclose yet that it intends to make an offer on.

The Small Sites Program funds in partnership with nonprofits the acquisition and rehabilitation of sites with five to 25 units. “We have a lot of these properties in the South of Market where our residents are particularly vulnerable to market pressure resulting in property sales, increased evictions and rising tenant rents,” said Claudine del Rosario of the Mayor’s Office of Housing.

The City’s Small Sites Program has purchased buildings with an average of six units and subsidized sales at about $350,000 per unit.

The Rincon Hill stabilization fee charged to developers was initially set at $14 per square foot and later reduced to $10.95 per square foot. Between fiscal year 2005 and 2016, the fund collected $30.2 million, which has been drawn down over the years.

The full board will vote on the spending proposal May 23. The $10 million is proposed to be placed on the budget committee reserve, meaning the Mayor’s Office of Housing would need to return with specific site acquisition plans to formally receive the money.

The purchases would add to three others previously completed in SoMa under the Small Sites Program, including 534 Natoma St., 1353-57 Folsom St. and 568-570 Natoma St.

If the proposed funds are spent, the SoMa stabilization fund will have $5.1 million remaining.

The City announced in April that the Small Sites Program, which launched in 2014, has used $36.2 million in city funding to help nonprofits purchase 19 properties, totaling 103 units. That funding includes revenue from the housing bond approved by voters in 2015, Inclusionary Housing Program fees, condo conversion fees, Development Impact Fees and the SoMa Stabilization Fund.

The small sites program recently helped the Mission Economic Development Agency nonprofit buy 63 Lapidge St. and 3198 24th St., with eight households, and helped the San Francisco Community Land Trust purchase 4042 Fulton St.

At the time, The City announced there were 10 other pending applications for small site purchases expected to close by the summer.